Committee to help guide SVMH's future

Salinas Valley Memorial Hospital is expected to convene a community advisory committee to help determine its future as a stand-alone organization.

On Thursday, board president Jim Gattis unveiled a proposal that calls for assembling a committee of local stakeholders to create an action plan designed to put the public district hospital on a path toward a "sustainable and viable future" on its own.

Gattis said it's essential to engage the community in the hospital's future after a highly stressful and divisive period in its history, including the exit of longtime CEO Sam Downing, major cost-cutting moves and consideration of potential affiliation opportunities that did not pan out.

"We need to take some small baby steps to rebuild trust," Gattis said.

Under the draft proposal by Gattis and hospital administrators Lowell Johnson, Bob Dvorak and Jim Griffith, the advisory committee would include representatives from the hospital board, administration, medical staff and other employees, along with the hospital foundation, service league and labor groups. The committee would also include area business and community leaders.

The proposal calls for hiring a facilitator, for up to $150,000, to oversee the process.

The committee's focus would be on planning a combination of revenue growth measures, such as expanding specific service lines, labor and non-labor cost reductions, and a physician alignment initiative designed to maximize access to care.

The goal is to improve the hospital's operational bottom line by about $30 million in preparation for the demands of national health care reform, which is expected to cut deeply into the hospital's reimbursement rates, and to rebuild reserves to about 150 days of cash on hand and save up for a new tower by 2030.

The committee would meet six times in evening public sessions from Oct. 3 to Jan. 10, with regular updates to the hospital board, which would consider the committee's recommendation on Jan. 24.

The proposal would still need to be formally adopted by the hospital board, likely by next month. Johnson asked the staff to make the proposal available on the hospital's website by Friday.

Also Thursday, the board approved the choice of an executive recruiting firm — Witt/Kiefer — to conduct a nationwide search for a new permanent CEO.

Downing, the previous CEO, left abruptly in April 2011 amid a growing firestorm over about $5 million in retirement pay he received while the hospital was issuing layoffs and other cost-cutting measures. The payout spawned a state audit of the hospital's business practices and a series of changes such as the elimination of supplemental pensions for hospital executives.

Downing and hospital board member Harry Wardwell are under investigation by the state Fair Political Practices Commission and the District Attorney's Office for potential conflicts of interest involving business dealings with companies linked to board members discovered as a result of the state audit. The DA's office is expected to announce its findings soon.

Gattis was also under investigation by the DA and FPPC as a result of separate allegations, but he has been cleared, said a source with knowledge of the investigation.

Meanwhile, Downing's interim replacement, Johnson, was the subject of a Los Angeles Times story Thursday for paying his daughter $4,000 to drive him to and from the airport in Seattle, where he lives, and then charging it to his Salinas Valley Memorial expense account during his first year on the job.

The veteran hospital administrator, whose contract runs through the end of the year, has been paid $10,000 per week, or $520,000 per year, since he was hired in spring 2011. He is allowed to charge the hospital up to $78,000 per year, or 15 percent of his pay, for personal expenses, including a $1,500 per week travel allowance, as well as reimbursement for business expenses.

The hospital has rented a Salinas home for Johnson at $3,500 per month, and has paid for his airfare, dinner, golf and other expenses.